To Compute the Present Value of $1,000 Discounted at the Rate

question 44

Multiple Choice

To compute the present value of $1,000 discounted at the rate of 5% per year, to be received at the end of 3 years, you should enter the following variables into a financial calculator

• A) N=3, i=.05, PV=1000
• B) N=3, i=5, FV=1000
• C) N=3, i=5, PMT=1000
• D) N=3, i=5, PV=1000

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Definitions:

Retailer

A business or individual that sells goods to the public in relatively small quantities for use or consumption rather than for resale.

Manufacturer

A person or company that makes goods for sale, especially on a large scale, involving processes such as designing, testing, and mass-producing products.

Fixed Cost

Expenses that do not change with the level of goods or services produced over the short term, such as rent, salaries, and insurance.

Holding Cost

The expenses incurred for storing and maintaining inventory, including warehousing, insurance, and depreciation costs.